Atrial natriuretic factor (ANF) and angiotensin (Ang II) exert potent effects on the regulation of electrolyte balance and blood pressure. ANF and Ang II normally antagonize each other. However, the molecular event underlying the interplay of Ang II and ANF remains to be established. The Ang II AT2 receptor has been shown to inhibit ANF- stimulated guanylate cyclase activity through an unknown protein tyrosine phosphatase. PC12 and rabbit renal tubular epithelial cells have been shown to possess an AT2 receptor subtype. Using these cells, we have found that Ang II inhibits ANF-stimulated guanylate cyclase activity and stimulates protein tyrosine phosphatase activities, and that transfection of the mitogen-activated protein kinase phosphatase (MKP- 1) and protein tyrosine phosphatase, SHP-1, inhibits ANF-stimulated guanylate cyclase activity. Therefore, MKP-1 or SHP-1 may be the protein tyrosine phosphatase that mediates the inhibitory effect of Ang II on ANF signaling. Our studiers indicate that binding of ANF induces the association of GCRP/GCRP-2 (guanylate cyclase regulatory proteins) with guanylate cyclase leading to enzyme activation. Recently, Dr. Douglas's laboratory has found that the AT2 receptor, through G protein betagamma subunits, releases arachidonic acid which then activates EGF receptor/ERK (mitogen-activate protein kinase) cascade. We have found that arachidonic acid induces the expression of MKP-1. Therefore, G protein betagamma subunits/arachidonic acid or EGF receptor/ERK cascade may mediate the effect of Ang II on MKP-1 induction or MKP-1/SHP-1 activation. Based on these findings, we hypothesize that: 1) Ang II activates or induces MKP-1/SHP-1 through G protein betagamma subunits/arachidonic acid or EGF receptor/ERK cascade; and 2) MKP-1 or SHP-1 then associates with and dephosphorylates either guanylate cyclase or GCRP/GCRP-2 leading to the inhibition of ANF-stimulated guanylate cyclase activity. To evaluate these hypotheses, using PC12 and renal tubular epithelial cells from rabbit angiotensin II AT1 and AT2 receptor knock out mice, we propose: 1) to examine whether MKP-1/SHP-1 is downstream of G protein betagamma subunits/arachidonic acid or EGF receptor/ERK cascade following Ang II activation; and 3) to examine whether MKP- 1/SHP-1 associate with and dephosphorylates either guanylate cyclase or GCRP (or GCRP-2) leading to the inhibition of ANF-stimulated guanylate cyclase activity. The information generated from these studies will help to understand the interplay of Ang II and ANF signaling in the molecular level.